Metaplanet Doubles Down: $130M Loan to Buy More BT Despite $643M Loss

Core Viewpoint - Metaplanet, Japan's largest corporate Bitcoin holder, has secured a $130 million loan to purchase additional Bitcoin despite facing over $635 million in unrealized losses, indicating a strategic approach to leverage its Bitcoin reserves for growth and capital restructuring [1][2][3]. Group 1: Loan and Financial Strategy - The loan is part of a previously established $500 million credit facility and is fully secured by the company's Bitcoin reserves [1][2]. - Metaplanet currently holds 30,823 BTC, valued at approximately $2.7 billion, with an average acquisition cost of $108,070 per BTC, leading to a total cost basis of $3.33 billion [2]. - The company has an unrealized loss of $635.97 million, or -19.1%, as Bitcoin trades below its acquisition cost [2]. Group 2: Use of Funds and Business Strategy - Funds from the new loan will be directed towards accumulating additional Bitcoin, expanding the Bitcoin income generation business, and executing share repurchases when market conditions allow [3]. - The income business, which involves selling Bitcoin options, achieved record sales during the third quarter [4]. Group 3: Market Position and Risks - Metaplanet's strategy is framed as a calculated bet on Bitcoin's long-term strength, using BTC as a hedge against Japan's weakening yen [4]. - Critics warn that leveraging a volatile asset like Bitcoin could lead to forced sales in the event of a sharp price drop, which may trigger margin calls and liquidations [5]. - The company is restructuring its capital base and has introduced plans for two classes of preferred shares to raise capital while limiting shareholder dilution [6].